The Benefits of Global Procurement, Without the Risks

• Turn-key importing – from the factory to your facility • Direct access to a broad base of approved offshore manufacturers • Wide range of OEM parts and industrial & construction products • Stringent quality control backed by two Asia-based ISO-17025/ A2LA accredited labs FASTCO (Shanghai) Trading Co., Ltd.

The Right Balance of Quality, Service, and Price The task of overseas procurement can be daunting, with complex payment terms, currency exchange volatility, foreign regulations, quality problems, and countless other risks. If you’re looking to drive down cost through global procurement, there are three basic options available: • Handle it internally • Work with a brokerage firm • Partner with a trading company The first option is often cost-prohibitive. The second offers little by way of service or quality assurance. That’s why many companies are choosing the third way – partnering with a trading company that takes full responsibility for quality, delivery, and competitive pricing.

More Than 20 Years of Global Sourcing Experience Fastenal has been sourcing product from international markets since 1989, working closely with approved global manufacturers to establish high-quality exclusive brands, add new product lines, and source special per-print components to meet our customers’ needs. In 2003, we took our global procurement operations to a new level with the launch of Fastenal Asia Sourcing & Trading Company FA STCO Export Cost of Goods (FASTCO) in Shanghai, China. Guided by $1,000 multiplier $200,000 a motto of “Quality is Everything,” FASTCO $181,000 provides internationally manufactured $151,825 commodities for the oil and gas, construction, $150,000 wind energy, automotive, OEM and MRO $120,754 industries, managing product flow, fulfillment, $100,000 $94,403 and inventory levels for 80,000+ Fastenal $66,959 SKUs. The combination of Fastenal’s North $50,000 $43,768 $37,734 American supplier base and FASTCO’s $33,193 $30,166 $25,738 network of approved international $19,060 $0 manufacturers makes Fastenal an efficient 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 single source for a vast range of procurement needs – with unmatched buying power. Whether you’re a small, medium, or large volume customer, FASTCO can assist your local Fastenal store with the procurement of product on your behalf. Here at FASTCO, global trading is our strength, and we invite you to learn more about how we can help you meet your cost and quality goals. The FASTCO Advantage Over the past 40+ years, Fastenal has grown from a small-town fastener store into the world’s 9th largest industrial distributor. In an increasingly global marketplace, FASTCO is a logical extension of Fastenal’s long-standing philosophy of “Growth Through Customer Service.” Here’s a look at what you can expect from FASTCO: Experience you can trust • Backed by Fastenal’s financial strength – $2B+ in revenue, zero debt • 20+ years of international procurement experience – FASTCO manages replenishment of 80,000+ Fastenal SKUs • Consistent shipment of over 5,900 containers annually A simple, personal process • Your local Fastenal store is your point of contact • No language barriers – all of our procurement specialists speak English • Once the RFQ is placed, our buyers source, qualify, quote and procure on your behalf while updating your store representative of all details • Turn-key logistics:

o C.I.F. (cargo, insurance, freight)

o All costs are landed and include preparation of documents for customs clearance

o Fastenal takes title of goods at origin and owns the inventory until it's delivered Stringent quality control • ISO 9001:2008 certified • Broad base of quality-certified suppliers – routine on-site audits conducted by FASTCO • Two ISO-17025 / A2LA accredited labs (Shanghai and Taiwan)

o Testing of pre-production and pre-shipment batch samples

o Engineering dept. reviews customer drawings • Manufacturers can reverse-engineer many components FASTCO (Shanghai) Trading Co., Ltd.

ISO 17025 A2LA Laboratories FASTCO performs on-site quality management system (QMS) audits of all suppliers prior to doing business with them. We also operate two A2LA laboratories – one in Taiwan and one in Shanghai. These state-of-the-art labs are equipped to perform the following testing to ensure product quality:

 Core hardness  Proof load  Axial tensile  Wedge tensile  Full size tensile and yield  Hydrogen embrittlement –  Tensile strength  Torque tension Stress  Rotational capacity  Drive test  Prevailing torque  Case depth  Decarburization  Ductility  Salt spray  Surface hardness  Plating thickness (zinc)  Dimensional  Fastenal product standard  Drill test

Laboratory Functions: • Testing of pre-production and pre-shipment batch samples to ensure industry and customer conformities • Assisting those suppliers whose rejection rates are above the supplier average to improve end-user satisfaction and strengthen supplier relationships

Supplier Quality Engineering (SQE) Fastenal is committed to continuous improvement both internally and externally, which is why we invested in our SQE division. This group works closely with FASTCO’s purchasing departments, engineers and, most importantly, our suppliers to proactively improve the quality of the components we procure. SQE’s responsibilities include: • Continually working with suppliers to improve performance and implement process controls and quality plans • Analyzing supplier capabilities; developing and maintaining supplier quality metrics • Performing supplier QMS audits and driving QMS improvement • Working with project teams to define project deliverables and planning • Developing new work processes, tools and functional capabilities while maintaining and improving existing quality system processes • Providing basic technical training for employees Quality is Everything

Mill Purchasing FASTCO’s Mill Purchasing division is your direct international procurement source for special per-print items. Working with Mill Purchasing, your local Fastenal store handles the entire overseas procurement process on your behalf – bringing world-class global manufacturers to your front door. • 15 buyers – each responsible for sourcing, qualifying, quoting and procuring product per customers' unique requirements • All buyers are fluent in both English and Chinese • Your Fastenal store manager deals with a dedicated buyer, minimizing risk of miscommunication • All items can be provided as part of a vendor-managed inventory (VMI) program through your local Fastenal store

Purchasing Focus: Other Capabilities: Need a special component Semi-Standard Fasteners Bearings that falls outside this scope? Stamped Components Castings Just contact your local Fastenal representative; we CNC Machined Components S/S Balls can generally coordinate a Custom Per Print Components Assembled Parts  response within 5-7 days. Medium Size Castings Drawer Slides Injection Molded Components Abrasives

Logistics FASTCO Logistics has a clear-cut mission: make sure our suppliers meet their deadlines Number of Containers Shipped and that international guidelines for shipping 6000 5900 and customs brokerage are strictly followed. 5102 5000 To that end, we prepare and present all 4538 required documents to ensure our containers 4000 meet international import/export laws to clear 3106 3000 customs. This includes: 2712

• Commercial Invoice 2000 1805 1850 1902 1612 1700

1208 • Certificate of Origin 1000

• Packing List 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 • Bill of Lading

All quotes are issued in landed cost format, meaning the price provided to you is inclusive of all logistics and freight costs. What you see is what you’ll pay, with no hidden costs or surprises. FASTCO (Shanghai) Trading Co., Ltd.

Sourcing In our efforts to optimize quality and value for Fastenal customers, FASTCO’s Sourcing division continually identifies high-quality sources in emerging markets such as India, South America, Eastern Europe, and numerous locations within and around Southeast Asia. Our 23 sourcing specialists continuously work to: • Identify new suppliers, pre-qualify factories, and assist the auditing team in the qualification process • Coordinate intensive testing for new products • Spearhead the development of 13 Fastenal Exclusive Brands, which span the majority of Fastenal’s product categories

Fastenal Exclusive Brands

Blackstone™ – Power Tools, Air and Hand Tools, Welding and Abrasives Body Guard™ – Safety Aspect™ – Office Products and Furniture Clean Choice™ – Janitorial DynaFlo™ – Hydraulics, Pneumatics and Power Transmission Equiprite™ – Material Handling, Storage and Packaging FMT™ – Metalworking and Cutting Tools FNL® – Fasteners Northway™ – Fleet and Automotive Supplies Power Phase™ – Electrical ProFitter™ – Plumbing, HVAC and Pumps Rock River™ – Power Tools and Accessories, Construction Supplies Tritan™ – Tooling Components and Precision Measuring All are built by best-in-class manufacturers to international standards. Yet because of our close working relationships with our OEM partners, we’re able to offer the product at a very competitive price. It’s part of our mission to provide Fastenal customers with new opportunities to reduce costs without compromising quality. Growth Through Customer Service

Export / Direct Import Services (DIS) FASTCO’s Export division works with our DIS team in the U.S. to drive additional cost savings by selling product direct to the end user while coordinating delivery of full or partial container loads direct to their dock. These services, which require minimal participation on behalf of the store, are limited to qualified business opportunities whereby traditional “VMI” or materials management solutions are not required by the customer.

Driving additional cost savings for customers who: • Consume frequently and in large quantities • Don’t require VMI services • Have the ability to receive and store full or partial container loads

Expanded product focus includes: • Castings (Small, Medium and Large) • Assembled Components • Forgings • Semi-Finished Goods • Finished Goods • Retail Products FASTCO will continue to aggressively invest in our people, technology and supplier relationships in order to continually exceed the expectations of Fastenal and its customers.

If you have any questions, or if you’re interested in pursuing a global procurement initiative with FASTCO, contact your local Fastenal representative. This is your “point person” for FASTCO service opportunities.

On behalf of FASTCO and Fastenal, we look forward to helping you reduce cost, minimize risk, and achieve your strategic business goals.